Trading Now

Trading Now

Wednesday, August 19, 2009


*the expectation of growth coming from these pundits just makes my blood boil. These are the same ijiots who saw goldie locks economy until the end of time because consumers were sooooo willing to borrow money. Well guess what? Consumers can't get any money to borrow and banks are only borrowing from Fed at 0% and lending to each other. Uh......any wonder that corporate bonds are >$1Trillion???
As U.S. recession nears end, fear of another begins
Worries about the length of the U.S. recession have been replaced by concerns that the recovery is a feeble one that will soon stumble and deteriorate into another downturn. Many said without strong consumer spending, the economy cannot fully recover, and as long as jobs are disappearing faster than they are created, consumers will not have the confidence to increase spending. (18 Aug.)

*and when the corporate defaults outweigh the coupons then what? With little consumption ahead expect more and more defaults.
Corporate-bond issuance worldwide surpasses $1 trillion
For the first time in a single year, global issuance of corporate bonds has exceeded $1 trillion. The boom partially has been because of investor demand as well as a tightening of loan standards by banks. Dollar-, yen-, euro- and sterling-denominated deals all have experienced an increase in issuance, most at record levels. "Corporate bonds are the No. 1 asset choice. We are very overweight in corporate bonds. The spread of corporate-bond yields over government-bond yields more than compensates for any company default risk," said Richard Batty, investment director at Standard Life Investments. Financial Times (tiered subscription model) (19 Aug.)
*so anyone claiming to be surprised better think twice before opening thy yap. I and many others have been warning about China and it's bubbles (and they have a few to be sure). So don't go whining when you wake up and have no more money left in your 401K.
Asian markets fall as shaky outlook weighs on Chinese shares
China's Shanghai Composite plunged 4.3% on Wednesday as an uncertain outlook overshadowed U.S. stock gains. Japan's Nikkei 225 slid 0.8%, Australia's S&P/ASX 200 inched down 0.2% and South Korea's Kospi Composite slipped 0.3%. Hong Kong's Hang Seng Index dropped 1.7%, New Zealand's NZX 50 inched up 0.3% and Taiwan's Taiex closed flat. The Wall Street Journal (19 Aug.)

*DEFLATION baby DEFLATION, that is the cure.
Falling food, energy costs drive down U.S. wholesale prices
Wholesale prices fell 0.9% in July, three times what economists had expected, the U.S. Labor Department said. Big factors were declines in the cost of food and energy. "Deflation worriers will find some cause for concern in the general picture, though the broad pattern remains one of gently oscillating monthly price changes, rather than sustained tip into decline," Pierre Ellis, senior economist at Decision Economics, wrote to clients. InvestmentNews/The Associated Press (18 Aug.)

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